ENGINEERING ECONOMY

ENGR. ALVIN JAMORA

GRADING SYSTEM
CRITERIA PERCENTAGE
ATTENDANCE 10%
PROBLEM POSING / PROBLEM 20%
GENERATION
QUIZZES 30%
MAJOR EXAM 40%
PROBLEM POSING / PROBLEM GENERATION
Purpose

1.Critical Thinking and Creativity: Problem posing encourages learners

to think critically and creatively. By formulating their own problems,
they engage in higher-order thinking and develop innovative solutions.
2.Deep Understanding: When students create problems, they need to
comprehend the underlying concepts thoroughly. This deepens their
understanding of the subject matter.
3.Application of Knowledge: Problem posing allows learners to apply
the knowledge they have gained in real-world scenarios. This
application fosters practical skills and enhances the relevance of their
learning.
PROBLEM POSING / PROBLEM GENERATION
Purpose

4. Ownership of Learning: Creating problems empowers students to

take ownership of their learning process. It promotes self-directed
learning and a sense of responsibility for their academic growth.
5. Engagement and Motivation: Students are more likely to be engaged
and motivated when they are actively involved in the learning process.
Problem posing makes learning more enjoyable and meaningful.
PROBLEM POSING / PROBLEM GENERATION
INSTRUCTIONS

➢ Create or generate a unique solved problem for each topic discussed.

➢ You may copy from a source (book or other literature) provided you’ll provide
information about your reference. However, this is highly discouraged.
➢ The generated or created problems must be 50 items for each of the discussed topics
until the major exam.
➢ Each generated problem must be unique and not similar to other learners' work.
➢ For each SIMILAR PROBLEM generated, 5 points will be deducted from your total
points.
➢ The work must be handwritten in engineering lettering on any bond paper. Yellow
pad is NOT allowed.
PROBLEM POSING / PROBLEM GENERATION
INSTURCTIONS

➢ A detailed solution must be presented accordingly, including graphs, tables, and other
relevant elements.
➢ Must be sent in 1 PDF file with the file name: SURNAME_NAME_EE-PS
➢ To be submitted through email in 1 pdf file: alvin.jamora89@gmail.com
➢ This must be submitted on or before 11:59 PM on the Sunday of the last topic before
the major exam.
➢ The subject of the email will be: EE_SECTION: PP_ SURNAME
 Introduction: Engineering Economics

Originally, engineering economics was the body of knowledge that

allowed the engineer to determine which of several alternatives was
economically best-the least expensive, or perhaps the most
profitable. In order to make this determination properly, the
engineer needed to understand the mathematics governing the
relationship between time and money. Most of this book deals with
teaching and using this knowledge. Also, for many kinds of
decisions the costs and benefits are the most important factors
affecting the decision, so concentrating on determining the
economically "best" alternative is appropriate.
 What is Engineering Economics
Recently, however, the trend has been for managers to become more
reliant on the technical skills of the engineers, or for the engineers
themselves to be the managers. Products are often very complex;
manufacturing processes are fine-tuned to optimize productivity;
and even understanding the market sometimes requires the
analytic skills of an engineer. As a result, it is often only the
engineer who has sufficient depth of knowledge to make a
competent decision.
Consequently, understanding how to compare costs, although still
of vital importance, is not the only skill needed to make suitable
engineering decisions. One must also be able to take into account
all the other considerations that affect a decision, and to do so in a
reasonable and defensible manner.
 Engineering Economics

➢ Science that deals with techniques of quantitative analysis

useful for selecting a preferable alternative from several
technically viable ones.

➢ Engineering economy is the analysis and evaluation of the factor

that will affect the economic success of engineering projects to
the end that a recommendation can be made which will insure
the best use of capital.
 Engineering Economics

The evaluation of costs and benefits is very important, and it has

formed the primary content of engineering economics in the past.
The mathematics for doing this evaluation, which is well developed,
still makes up the bulk of studies of engineering economics.
However, the modern engineer must be able to recognize the limits
and applicability of these economic calculations, and must be able
to take into account the inherent complexity of the real world.
 Consumer and Producer Goods and Services

Consumer goods and services are those product or services that are
directly used by people to satisfy their wants.

Producer goods and services are used to produce consumer goods

and services or other producer goods
 Necessities and Luxuries
Necessities are those products or services that are required to
support human life and activities, that will be purchased in
somewhat the same quantity even though the price varies
considerably.

Luxuries are those product or services that are desired by humans

and will be purchased if money is available after the required
necessities have been obtained
 Demand
Demand is the quantity of certain commodity that is bought at a
certain price at a given place and time.

Elastic demand occur when a decrease in selling price result in a

greater that proportionate increase in sales.

Inelastic demand occur when a decrease in the selling price of

produces a less than proportionate increase in sale

Unitary elasticity of demand occur when the mathematical product

of volume and price is constant.
 Competition, Monopoly and Oligopoly
Perfect competition occurs in situation where a commodity or
service is supplied by a number of vendors and there is nothing to
prevent additional vendors entering the market.

➢ A classic example of perfect competition is the agricultural

market for a widely traded commodity like wheat, corn, or
soybeans. Let's take the example of the wheat market
 Competition, Monopoly and Oligopoly
Monopoly is the opposite of perfect competition. A perfect monopoly
exist when a unique product of service is available from a single
vendor and that vendor can prevent the entry of all others into the
market.

➢ A classic example of a monopoly is Microsoft's historical

dominance in the operating systems market with its Windows
operating system
 Competition, Monopoly and Oligopoly
Oligopoly exists when there are so few suppliers of a product or
service that action by one will almost inevitably result in similar
action by others

➢ An example of an oligopoly is the smartphone industry. In this

market, a few major companies dominate the production and
sale of smartphones, and they collectively exert a significant
influence on the market.
 The Law of Supply and Demand
Supply is the quantity of a certain commodity that is offered for
sale at a certain price at a given place and time

The Law of supply and demand may be stated as follows:

“Under condition of perfect competition the price at which a given

product will be supplied and purchased is the price that will result
in the supply and the demand being equal.
 Example: Buying a Car
Ben Tisoy has been given a one year assignment in Bicol, and he
wants to buy a car just for the time he is there. He has three
choices, as illustrated below. For each alternative is a purchase
price, an operating cost including gas, insurance, and repairs), and
an estimated resale value at the end of the year. Which should Ben
buy?

1989 Toyota 2010 Mazda 3 2023 Honda

Corolla City
Purchase Price Php. 50,000 Php. 300,000 Php. 973,000
Operation Php. 30, 000 Php. 22, 000 Php. 14, 000
Resale Price Php. 40,000 Php. 250,000 Php. 750,000